Los Angeles' Orange Economy Potential

Developing an atlas prototype for evaluating the potentials of orange economy in Los Angeles.

What is Orange Economy?

The Orange Economy refers to businesses where goods and services have intellectual value because they are the product of the expertise and creativity of individuals. It includes all business rooted in creativity and knowledge such as art, culture, research, science and technology. This broad definition is overarching which makes classifying business outlets as part of a local Orange Economy complex. Furthermore, many of the smaller businesses are embedded in a dynamic sector of the economy that often includes less established trading practices such as temporary markets, fairs, “swap meets” as well as person to person business. Thus, a precise classification of businesses belonging to a local Orange Economy requires efforts in local contextualization and defining.

In this regard, the following presents a potential framework for OE business classification based on Richard E. Crave's characteristics of the creative economy[1].

Characterizing OE

Richard E. Caves identified seven properties used to describe the creative industry which are often used to describe the Orange Economy.

I. Nobody knows principle: Demand is uncertain and it is often created by consumer reactions to products that are not known beforehand and require knowledge to understand their value. Consumers become aware of them as they experience them and become more engaged in specialized communities, such as art galleries, toy collectors, film clubs, among others.

II. Art for art's sake: Workers, creators and entrepeneurs invest time and resources in originality, skill, knowledge, etc. They often settle for lower profits in lieu of personal harmony and satisfaction.

III. Motley crew principle: Business relies on specific skills and knowledge found in the members of a particular community. For example, local book stores rely on small communities of book connoisseurs in order for them to provide products and services that differentiate them from other outlets.

IV. Infinite variety: Products and services are the result of a combination of knowledge, skill and experience of connoisseurs which leads to infinite variety that is discovered through engagement in these local economic communities.

V. A list/B list: Members are rated on their skills, originality, and proficiency. Small differences in skills often yield in differences in success.

VI. Time flies: Coordinating with diversely skilled workers, curators and makers often depends on trends and moments thus time is of the essence.

VII. Ars longa: Creative products have intellectual and experience aspects that generate profits through copyrights, authenticity certifications, royalties among others.

Orange Economy and Sustainable Development

Framed within the United Nations Sustainable Development Goals (SDGs), OE can play an important role in local economic development. It is directly related to a number of SDGs such as SDG 8. Government and institutions are expected to support local businesses in order to keep money circulating in the community and provide decent work for all, encourage citizen participation in economic planning, promote equitable employment and fair trade and develop a skilled workforce [2].

Furthermore, the OE may also contribute to SDG 12 (Responsible consumption and production). Second hand fashion is a clear example of this. According to a report by the Ellen Macarthur Foundation, from 2000 to 2015 the number of clothing sold each year more than doubled. Also, he number of times an item is worn decreased by almost 40% posing an important waste issue worldwide [3]. Further, ThredUp estimated that if everyone in the US bought one used instead of new item in 2020 it would save: 3.6 metric tons of CO2, 100 billion liters of water and 200 million kilograms of waste [4].

It is worth mentioning that these goals are more likely to be met in cities where cultural communities are empowered to make use of their influence and resources to contribute to local economies.

Additionally, a number of initiatives and studies also consider the creative economy to be an important element to developing the role of youth, minority groups, women and informal workers worldwide. According to a report by the World Bank, the Orange Economy can play an important role in more, better and more inclusive jobs as well as provide local economic stability by relying on intellectual assets and not on natural resources and commodities. For example, during the 2009 recession while oil exports declined by 40% creative goods and services exports experienced only a 12% reduction [5, 6].

Figure taken from Orange Economy As a Driver of Jobs for Youth (2020).

Local businesses that belong to an OE community can play an important role in this because 1) because a majority of these outlets are locally owned and operated, 2) train and employ highly skilled and knowledgeable members of the community and 3) contribute to the construction of a local identity; all crucial for the cultural economy.

An example of this is Long Beach, which is known for being home to a number independent record stores including  V.I.P. World Famous Records  a cultural landmark for hip hop and Los Angeles. Sadly, the store's iconic sign was removed approximately 5 years ago [7]. This is one example of a specific sector of OE that could be used to develop a local identity.

Evaluating OE Potential in L.A.

The use of maps and an index to help identify cultural hubs or clusters within Los Angeles can be an effective way to evaluate OE potential. While the OE is ample, I chose to focus on: 1) record stores, 2) bookstores, 3) film clubs, 4) art galleries and 5) second hand fashion stores and build a prototype atlas to help evaluate the potential of OE in Los Angeles. To do so, I:

  1. Developed Orange Economy choropleth maps to identify neighborhoods with potential for development of specific sectors
  2. Designed an Orange Economy Neighborhood Index to evaluate its potential on a neighborhood scale based on concentration and variety of outlets as well as proximity and connectivity between them
  3. Developed an Orange Economy Potential Map based on the index above

Data

I used data grouped in three categories: 1) Orange Economy Outlets, 2) Boundaries and 3) Connectivity as follows.

Data category 1: Orange Economy Outlets

The cultural industry of Los Angeles is influential worldwide. The power and influence of the city’s film and music industry is undeniable, making it a global cultural hub [8]. However, I argue there are likely a less noticed network of local cultural hubs that can become drivers for tourism and local economy.

Category I: Record Stores

Record store communities are a clear example of this. As a collector, I actively engage in this community and believe it has potential to drive local economy in the city. A total of 112 record stores were found, although some were in the Greater Los Angeles region.

Category II: Bookstores/Clubs

Bookstores and clubs could be local economy catalysts by generating foot traffic of book lovers to certain areas of the city. The Last Bookstore in Downtown L.A. is a clear example. A total of 84 bookstores were identified including 6 Barnes & Noble stores.

Category III: Art galleries and exhibition halls

Local independent art galleries contribute to OE by promoting local and international artists. Successful events can increase foot traffic and help boost the local economy. 114 art galleries were found, major museums such as MOLA and The Broad were not included.

Category IV: Film clubs/Independent Cinemas

Given the city's relationship with the film industry, there are likely a large number of film clubs, festivals and independent movie theaters in L.A. A total of 25 video/film clubs and independent cinemas were found in the search.

Category V: Second hand fashion stores

From general thrift store shopping to upscale second hand shopping, used clothing shops have become increasingly popular in the past decade. 178 second hand clothing outlets were found, some were chain outlets such as Goodwill and Buffalo Exchange.

Orange Economy Outlets

The five sectors were selected from intentional flaneurism while visiting the city, and outlets were identified by searching Google Maps. Data selection is likely biased and not comprehensive, because it was based on my personal experiences. However, I consider them a good sample given the scope of this project.

Data category 2: Boundaries

Los Angeles Neighborhood and Priority Growth Areas were used as boundaries to perform the analysis. It is worth mentioning that unincorporated areas such as Angeles Crest and Long Beach, could have smaller areal units that were not consulted.

Data category 3: Connectivity

Metro Rail Stations and Metro Bus Stops were used to evaluate connectivity between outlets and public transportation. Local public transportation service data, such as LADOT, was not included.

Evaluating OE in Los Angeles

Orange Economy Density and Diversity A combination of basic point density and choropleth maps were used as tools for exploratory data analysis and help visualize concentrations and diversity of outlets in neighborhoods.

Orange Economy Neighborhood Index Indexes are built on a collection of indicators that help evaluate a complex phenomenon by converting data from various sources into information that is easy to understand. Constructing an index begins with collecting and grouping data and ends with information that facilitates decision making. Indicators are considered valid when they are 1) relevant to development factors and are sensitive to change, 2) reliable in that they come from valid resources and are collected in an unbiased manner and 3) are user friendly and relevant to the final user [9].

I propose a prototype index meant to estimate Orange Economy potential by neighborhood in Los Angeles. The index is composed of three indicators: 1) Connectivity Score, 2) Proximity Score and 3) Outlet Score. All scores were calculated using QGIS distance matrix and vector analysis tools as follows.

Connectivity Score

  • Evaluates access to the outlet via public transportation using distances from outlets to METRO bus stops and train stations.
  • Scores are based on the Nearest Neighbor Index (NNI) [10, 11] which is the ratio of the observed distance and the expected distance. Where:
    • Observed distance is the mean distance from outlets to the nearest transportation hubs
    • Expected distance is the mean distance from outlets to all of the transportation hubs
    • Connectivity Score = Observed Distance / Expected Distance, calculated for bus stops and train stations.
    • Score range 0 to 2. (one point maximum for bus stop connectivity and one point maximum for train station connectivity)

Proximity Score

  • Also based on NNI, evaluates the distance (in meters) between the 5 nearest outlets, lower values mean outlets are closer to each other, hence within a walkable distance.
    • Observed distance is the mean distance from outlets to the 5 nearest outlets.
    • Expected distance is the mean distance between all outlets.
    • Proximity Score = Observed Distance / Expected Distance between outlets.
    • Score range 0 to 1.

Outlet Score

This score is based on diversity and density of OE outlets in the neighborhood. Diversity is evaluated using Simpson's Diversity Index that has been used to evaluate ecosystems, land use, industrial activity among others. Density is simply number of outlets per square kilometer. Diversity and density are important because it means potential visitors can visit more than one outlet when they visit a neighborhood. Instead of visiting a store and leave, clusters of OE outlets might motivate engagement with more than one type of business.

  • Simpson's Diversity Index = 1 - (sum(n(n-1))/(N(N-1))
    • n is the number of outlets for a given category
    • N is the total number of outlets
  • Outlet Density = # of outlets / area (square km)
  • Outlet Score = Simpson's Diversity Index * Outlet Density
  • Range varies. For this prototype it ranged from 0 to 2.5

Orange Economy Neighborhood Index

Finally, OE Neighborhood Index is simply the sum of the three previous score, which in this prototype ranged from 0 to 5.5.

Results: Preliminary Atlas of L.A.'s Orange Economy

Orange Economy Density and Diversity

This map illustrates sum of outlets from all sectors in each neighborhood the color indicates diversity of outlets from the five categories used in this study:

  1. Record Stores
  2. Bookstores
  3. Film clubs/Independent cinemas
  4. Art galleries
  5. Second hand fashion stores

Record store Density

Simple choropleth map that illustrates density of record stores per neighborhood. I expected Long Beach to result as a record store hub but Highland Park and Lancaster with 4 and 3 record stores surprised me.

Bookstore Density

Simple choropleth map that illustrates density of bookstores per neighborhood. Pasadena, Canoga Park, Long Beach, Torrance and Monterey Park stood out with 4 book stores.

Film clubs/Independent cinema Density

Not surprisingly, downtown L.A. had 4 film clubs. Sawtelle, Long Beach, Beverly Hills and Los Feliz stood out with two film clubs in each of those neighborhoods.

Art gallery Density

Hollywood, and of course downtown L.A., where the art's district is located, seemed to concentrate art galleries. Again Long Beach also appeared in this category.

Second-hand Fashion store Density

Pasadena, Lancaster, Whittier and Long Beach seem to be second hand fashion hubs. Downtown L.A. and Fairfax also stood out in this category.

OE Neighborhood Index

The result of using data to generate an index is an easy way to evaluate OE potential by neighborhood in Los Angeles.

OE Neighborhood Index and Priority Growth Areas

A simple overlay reveals overlap in many of the Priority Growth Areas (PGA) and neighborhoods with a high OE Neighborhood Index. Thus including OE development strategies in specific neighborhoods could potentially contribute to the PGA development plans.

For more information about PGAs visit  SCAG .

Final Remarks

Recommendations and prospective

Results clearly show that certain neighborhoods show potential to be developed as OE hubs in the city. As recommended by literature related to SDGs, OE is a potential driver for resilient local economy that requires the involvement of local government and institutions. Promoting neighborhoods as OE hubs could be used not only to develop the local economy but to promote local tourism and to construct a local identity for different regions in the city. In this regard, the following highlights and recommendations could be considered to improve local resource and initiative allocations:

  1. Record collecting hubs: Long Beach, Highland Park and Lancaster are potential record collecting hubs in Los Angeles could benefit collaborative record collecting fairs co-organized with the local record shops and chamber of commerce. Another possibility is to co-produce limited edition recordings of local artists that are to be sold exclusively in local record shops.
  2. Bookstore hubs: Canoga Park is a relatively small neighborhood but home to 4 bookstores and is bordered on the south by Woodland Hills which also has a relatively high concentration of bookstores.
  3. Art gallery hubs: While the Art's District and in general the central part of the city is an obvious choice, Canoga Park and Alhambra also showed potential for art gallery OE development. Decentralizing support for major arts exhibitions and supporting smaller galleries in this region could be a possibility.
  4. Film club hubs: Unsurprisingly Hollywood, Downtown L.A. and Long Beach seem to be film club hubs. Considering the city's relationship with the film industry, perhaps a possible question to ask is whether or not developing this sector in other neighborhoods is worthwhile.
  5. Second hand fashion hubs: Downtown L.A., Long Beach and Pasadena were somewhat expected, but Covina, Whittier, Fairfax and Lancaster also seem potential second hand fashion hubs. As with record collecting, second hand fashion fairs and events co-organized with local governments and chambers of commerce could potential help exploit this sector.

Importantly, it is worth mentioning that local governments should consider to make an effort to include the local population if OE potential is developed in order to avoid potential gentrification effects.

Discussion and Limitations

As mentioned, classifying small businesses as part of a local OE is challenging because the term itself is overarching and categories could vary regionally. For instance, the creative economy industries in Los Angeles are likely different than they are for other cities. For this reason a number of studies recommend further research regarding this economic sector [5, 6]. Also, due to the limited scope of this project, outlet selection was manual which is subject to a selection bias. Using different search terms yielded different results; for instance when searching for art galleries the terms: "art gallery", "art exhibition" and "exhibition space" resulted in the discovery of different outlets. Another approach could be using API's for a more nuanced programmatic approach. Transportation data also limited this preliminary work. For instance, public transportation was only evaluated using data from METRO, and excluded local public transportation services such as DASH, LADOT, Long Beach Transit, among others. Due mostly to time and resource constraints the following limitations and improvements are worth mentioning.

  • Euclidean distances were used to evaluate connectivity and proximity. Using network analysis and/or Manhattan distances could be a better approach.
  • Distribution patterns of the distances was not taken into consideration and are likely not normal because there is a lot of variance in distances between outlets.
  • Distances were calculated for overall then summed by neighborhood, so some of the estimated distances could be between points in other neighborhood. Stratifying data by neighborhood may yield a more accurate evaluation.
  • Outlet categorization and counts were performed manually. Larger amounts of data can be mined from directories such as Yelp and Google Maps using APIs.

Conclusions

While the data and methods were limited, the OE Neighborhood Index is a simple and fairly straightforward method to analyze the potential to develop local economy on a neighborhood level in Los Angeles. Results also contribute to the development of decision support systems for local government programs designed to allocate resources more effectively and better support local small businesses. Furthermore, expanding the data and methods used for this prototype could be applied to develop practical tools such as an Orange Economy Directory or app that could help local businesses construct local economy communities and promote local businesses. On the other hand, this same tool could be used to help better understand the contributions and limitations of this sector in the different regions that comprise Los Angeles.

Conflict of interest declaration

I selected the categories used for this prototype based on personal preferences and interests. I am a record collector, purchase used clothing and often visit the types of outlets selected for this prototype. Other categories that could be included but were not due to a selection bias could include: car clubs, toy collecting shops, recycling centers, independent theaters among others.

About me

I am a COMEXUS-Fulbright awardee enrolled in the Population, Health and Place PhD at the Spatial Sciences Institute at University of Southern California. I have a BS in Environmental Engineering and an MS in Urban Studies and Design from Universidad Autonoma Metropolitana in Mexico City. I also hold a specialization in Geomatics from The Center for Research in Geography and Geomatics also in Mexico City. My general research interest is sustainable urban development, but I am currently focusing on food systems.  WEBSITE .

References

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